8236 Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 

12For purposes only of waiving the operative date 

of this proposal, the Commission has considered 

the rule’s impact on efficiency, competition, and 

capital formation. See 15 U.S.C. 78c(f). 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(4). 

5The Commission has modified the text of the 

summaries prepared by OCC. 

6OCC is aware that some markets may not have 

systems capable of making such identifications. 

7This step requires the clearing member to 

assume for each account that all trades defaulted to 

open, that OCC has received correct information on 

all trades, and that post-trade instructions affecting 

The Commission notes that this filing 

does not change the trading hours of the 

Derivative Securities Products listed in 

NYSE Arca Equities Rule 7.34, but 

codifies trading hour sessions that have 

been established through other rule 

changes or through the use of the 

Exchange’s generic listing standards 

pursuant to Rule 19b–4(e) under the 

Act. For these reasons, the Commission 

designates the proposed rule change as 

operative immediately.12

At any time within 60 days of the 

filing of the proposed rule change the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2007–13 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2007–13. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro/shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing will also be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File number 

SR–NYSEArca–2007–13 and should be 

submitted by or before March 16, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3067 Filed 2–22–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55307; No. SR–OCC–2006–

22] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Enhance 

Futures Clearing Services by Providing 

an Alternative Method for Effecting 

Gross Position Adjustments and 

Certain Trade Management Services 

February 15, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder 2

notice is hereby given that on December 

19, 2006, The Options Clearing 

Corporation (‘‘OCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by OCC. OCC filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(4) 4 thereunder, which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the rule change 

from interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

OCC proposes to amend Rule 401 to 

accommodate an alternative method for 

effecting gross position adjustments and 

to enable members to update certain 

non-critical trade information. The text 

of the proposed rule change is available 

at http://www.optionsclearing.com, at 

the OCC, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

OCC included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. OCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.5

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

OCC proposes to amend Rule 401 to 

accommodate an alternative method for 

effecting gross position adjustments and 

to enable members to update certain 

non-critical trade information. 

Position Adjustments 

Following the practice in the futures 

markets, OCC does not require that 

matched trade information submitted by 

a market identify each trade as opening 

or closing.6 If a market elects to submit 

trade information without opening or 

closing identifiers, OCC treats all 

transactions as opening transactions. A 

clearing member then submits gross 

position adjustment information at the 

end of the day to reduce its positions to 

reflect the actual open interest in its 

accounts. In order to calculate gross 

position adjustment information for 

each position in a series of futures 

contracts, a clearing member must: 

determine its net ending position in that 

series; calculate its gross ending 

position in that series on OCC’s books;7


cprice-sewell on PROD1PC61 with NOTICES
Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 8237 

the segregated futures account were processed 

correctly. 

8Typically, a firm advises the clearinghouse of 

the correct ending long position in each series, and 

the clearinghouse adjusts both long and short 

positions in the clearing member’s segregated 

futures account to ensure its books reflect such 

position and remain in balance. 

9 15 U.S.C. 78q–1. 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(4). 12 17 CFR 200.30–3(a)(12). 

determine the gross position adjustment 

for that series by comparing the net 

ending position on its books with its 

calculation of the gross ending position 

on OCC’s books; and submit gross 

position adjustments for each series in 

each account to OCC to ensure that 

OCC’s records reflect the actual open 

interest. 

Futures commission merchant 

(‘‘FCM’’) clearing members find this 

process cumbersome and complex. 

These clearing members have requested 

OCC modify its systems to permit an 

alternative method of submitting gross 

position adjustment information. 

Specifically, they want to be able to 

advise OCC of the correct ending 

position for each series of futures 

contracts in their account(s) and have 

OCC compare the information to the 

current positions carried on OCC’s 

books and effect the necessary position 

adjustment.8 OCC understands this 

method of effecting gross position 

adjustments is commonly used by other 

futures clearing organizations. 

Only minor changes to the 

Interpretations and Policies to OCC’s 

Rule 401 are necessary to support this 

alternative method of determining the 

actual open interest for futures. OCC 

proposes to amend Interpretation and 

Policy .01 to clarify that if there is an 

insufficient number of contracts in the 

account to effect the stated position 

adjustment, the adjustment will be 

applied only up to the number of 

available contracts and the remainder of 

the adjustment will not be affected. 

Non-Critical Trade Information 

FCM clearing members also have 

asked to use OCC’s systems to update 

non-critical trade information, a practice 

that is customary within the futures 

industry. Non-critical trade information 

includes customer account or other 

identifying information or codes. Only 

minor changes to Rule 401 are required 

to accommodate this request. OCC is 

proposing to add a second interpretation 

to Rule 401 to provide that its systems 

may be used for such purposes provided 

that such updates are not in 

contravention of any rule of the 

exchange or market on which the trade 

was executed. 

OCC will not implement this rule 

change until the requisite systems are 

available, which is expected to be in or 

about the first quarter of 2007. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 17A of the Act,9

as amended, because it promotes the 

prompt and accurate clearance and 

settlement of transactions in derivatives 

contracts by providing mechanisms that 

are designed to ensure OCC’s books and 

records contain accurate information 

regarding actual open interest in futures 

contracts and because OCC is able to 

provide its FCM clearing members with 

services that are standard in the futures 

industry. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change will not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purpose of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were not and are 

not intended to be solicited with respect 

to the proposed rule change, and none 

have been received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has become effective upon filing 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 10 and Rule 19b–4(f)(4) 11

thereunder because the rule does not 

adversely affect the safeguarding of 

securities or funds in the custody or 

control of the clearing agency or for 

which it is responsible and does not 

significantly affect the respective rights 

or obligations of the clearing agency or 

persons using the service. 

At any time within sixty days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–OCC–2006–22 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–OCC–2006–22. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filings also will be 

available for inspection and copying at 

the principal office of OCC and on 

OCC’s Web site at http:// 

www.optionsclearing.com. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–OCC–2006–22 and should 

be submitted on or before March 16, 

2007. 

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3071 Filed 2–22–07; 8:45 am] 

BILLING CODE 8010–01–P 


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